Jesse Duke, IBEX Valley Environmental Consulting - Van Horne ...

CasinoPresentation to Northern Transportation ConferenceAnchorage, Alaska, Sept 2011WWW.WESTERNCOPPERCORP.COMTSX:WRN / AMEX:WRNTSX: WRN / AMEX: WRN

Presentation overview• What is Casino and why is it important?• Casino as a case-example of access challenges for northern projects• Transportation Planning: lessons learned• Moving forward – what needs to be done and when?TSX:WRN / AMEX:WRN3

First, a word about copper• Copper consumption has beenconsistently growing by 3.4% peryear• Additional copper production of600,000 tonnes per year will berequired – 10 mines the size ofCasino• Increased copper production willrequire large copper projects suchas Casino• “Copper producers will have themost difficulty in keeping up withgrowing demand. We forecast anunderlying market deficit by2011…” - RBS Oct 2009 ReutersCOPPER CONSUMPTION (Million tonnes/year)Source: Rio Tinto Presentation, 1900-1928 McGraw Hill (1931), 1929-2008 CRUTSX:WRN / AMEX:WRN COPPER 4

CASINO PROJECTTSX:WRN / AMEX:WRN 5

WORLD CLASS DEPOSITCASINO• Western Copper’s flagship property• Significant gold, copper, molybdenum, and silver resource• Pre-feasibility study released in AprilGOLDCOPPERMOLYSILVER8.3 M4.4 B494 M61 Moz Reserveslbs Reserveslbs Reservesoz Reserves0.7 Moz M&I0.3 Blbs M&I65 Mlbs M&I4.3 Moz M&I9.0 M5.4 M723 M76 Moz Inferredlbs Inferredlbs Inferredoz InferredNote: M & I resources exclusive of P&P reserves see appendix for detailed Casino reserve & resource. Based on 0.25% CuEq cut-offTSX:WRN / AMEX:WRN WESTERN COPPER CORPORATION 6

WORLD CLASS RESOURCECOPPER EQ (B lb contained)GOLD (M oz contained)3025252020151510105500Casino (WRN)Galore Creek(NG)Prosperity(TKO)Haquira (ANM)PumpkinHollow (NCU)Rosemont(AZC)Detour Lake(DGC)Casino (WRN) Prosperity (TKO) Malartic (OSK) Galore Creek(NG)COPPER (B lb contained)MOLY (M lb contained)1418001600121400101200810006800426004002000Galore Creek(NG)Casino (WRN)PumpkinHollow (NCU)Haquira (ANM)Rosemont(AZC)Prosperity(TKO)0Mt. Hope (GMO) Casino (WRN) Rosemont (AZC) Haquira (ANM)Proven & Probable Measured & Indicated InferredNote: Reserves & resources from corporate websites or technical reportsSee appendix for detailed Casino reserves & resources. See note 9 for copper equivalent calculationTSX:WRN / AMEX:WRN CASINO PROJECT - YT 7

Pre-TaxAfter-TaxPRE-FEASIBILITY STUDY (April 2011)CAPITAL COSTSMINE CAPITAL (C$ M) 1,750POWER PLANT (C$ M) 260ROAD, PORT, ETC. (C$ M) 120TOTAL CAPEX (C$ M) 2,130ECONOMICSNote: See note 3 in appendixSPOT LONG TERMMar 2011COPPER (US$lb) $4.30 $2.50GOLD (US$oz) $1,439 $1,100MOLYBDENUM (US$/lb) $17.25 $14.00SILVER (US$oz) $37.87 $17.00FOREIGN EXCHANGE (US$:C$) $1.00 $0.90NPV @ 5% (C$ M) 5,860 2,570NPV @ 8% (C$ M) 3,927 1,570IRR (100% equity) (%) 32.2% 19.6%NPV @ 5% (C$ M) 4,004 1,700NPV @ 8% (C$ M) 2,621 963IRR (100% equity) (%) 26.8% 16.2%CASH FLOW (Y1-Y4) (C$ M/y) 830 567CASH FLOW ( LOM ) (C$ M/y) 430 250PAYBACK (y) 2.1 3.3Cu CASH COST (net of credits) (US$/lb) (0.49) 0.06TSX:WRN / AMEX:WRN CASINO PROJECT - YT 8

PRE-FEASIBILITY STUDY (April 2011)OPERATINGDATAY1 to Y4 LOMGOLD PRODUCTION (k oz/y) 435 262COPPER PRODUCTION (M lb/y) 234 157MOLY PRODUCTION (M lb/y) 13 12SILVER PRODUCTION (k oz/y) 1,560 1,370STRIP RATIO 0.51 0.72% OF REVENUE - COPPER 46% 45%% OF REVENUE - GOLD 39% 35%% OF REVENUE - MOLY 13% 2%% OF REVENUE - SILVER 2% 18%NSR ($/t ore milled) 26.84 19.33AVERAGE MILL GRADE CuEQ (%) 0.71% 0.50%MILL OPERATING COSTS (C$/t) 9.70RESERVETonnes Copper Gold Moly Silver Cu Eq* Copper Gold Moly SilverM % g/t % g/t % B lb M oz M lb M ozMill Ore 976 0.20 0.24 0.023 1.7 0.50 4.4 7.5 494 54Heap Leach Ore 82 0.04 0.32 - 2.4 n/a 0.1 0.8 - 6Note: See notes 2 and 3 in appendixTSX:WRN / AMEX:WRN CASINO PROJECT - YT 9

GRADES IN LINE WITH CURRENT OPERATIONS & PEERSCasino Life of Mine (976 Mt)CASINOCasino Y1-Y4 (164 Mt)Highland Valley-TCK (2009)Gibraltar-TKO (2008)OPERATINGMINESKemess-NGX (2009)Copper Mountain-CUM (211 Mt)Mt. Milligan-TC (482 Mt)Prosperity-TKO (831 Mt)PEERSRosemont-AZC (559 Mt)0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80Cu Eq Grade (%)Copper Molybdenum Gold SilverNote: Casino data based on reserves, see appendix. Peers’ data based on reserves. Operating mine data based on average grades during year indicatedOther company data from corporate websites or technical reports. See appendix for detailed Casino reserve. See note 9 for copper equivalent calculationTSX:WRN / AMEX:WRN CASINO PROJECT - YT 10

Casino as a case example• The Casino project will require 20 M ft 3 of natural gas per day deliveredas LNG delivered to a mine-mouth 120 MW powerplant - initiallyimported through the port of Skagway;• Both a copper and molydenum concentrate will be shipped via the port ofSkagway by truck at the rate of 270,000 tonnes/yr.• Requires upgrade of 106 km of existing resource road upgrade (leg 1)• 130 km of new road – Freegold Road Extension (leg 2) – First major newroad infrastructure in the Yukon in 30 years.• New road construction costs approximate $1 million/km (or $1.4million/mile)TSX:WRN / AMEX:WRN11

Access to Casino: Freegold Road ExtensionTSX:WRN / AMEX:WRN12

Some Background• First reference to federal government discussion on access datesback to 1965.• “Casino Trail” surveyed and proposed by the federal government inearly 1980’s• Same route identified as part of a Yukon-wide access corridor studyin 1996;• Affirmed as best route by Western Copper as part of pre-feasibilitystudies. Not the lowest cost option but:• Most regional long-term benefit;• Least overall effect on environment and wildlife;• Least environmental footprint (over existing trails and roads asmuch as possible.TSX:WRN / AMEX:WRN13

1996 Access Corridor Study (Yukon Government)TSX:WRN / AMEX:WRN14

Exploration Investment and BenefitsFreegold Road AreaExploration Spending• Estimated at $84+ million in2000-2010 (mostly since 2004).• 2010 exploration expenditurespoised to exceed $30 million• 100 seasonal jobs generated byexploration and placer miningactivityOver 40 companies activeOther local and First nations usersIntroductionTSX:WRN / AMEX:WRN 15

Alaska – Canada Railway feasibility (2006)Alternate route wasvery near the CasinoProject.No further workplanned at this time.TSX:WRN / AMEX:WRN16

The current situation:TSX:WRN / AMEX:WRN17

Challenges• Shift in paradigm over the last 30 yearsFrom• “Roads to Resources” – infrastructure asa driver of economic opportunity• Active government sponsorship and fundingTo• Focus on environment and effects onwildlife –− Focus on minimizing impacts/restorationand− controlling access to minimize effects ofnon-mining users− Much less government attention/interestTSX:WRN / AMEX:WRN18

Challenges• The reality:• Regional governments do not have resources to respond to quicklyemerging need for resource road maintenance and upgrades tosupport industrial activity – but in Yukon they are trying.• The competition:• Lobby by numerous companies for attention to growing need –competition for few dollars• The costs:• (rule of thumb: $1 million /km)• Major new infrastructure is controversial and requires careful regionalplanning – particularly effects on other land users and aboriginal interestsTSX:WRN / AMEX:WRN19

Steps moving forward: Step 11. Planning: preliminary engineering, Pre-feasibility cost estimates, publicengagement and environmental work (Casino is at this stage now)TSX:WRN / AMEX:WRN20

Step 21. Permitting: secure tenure, figure out who is responsible for what(public vrs. private ownership)• Potential conflicts should be sorted before or during this stageTSX:WRN / AMEX:WRN21

Step 3 - Negotiate• Bankable Feasibility stage – strong indication project is a “go.”• Public – Private Partnerships (PPP) may emerge at this point− Bring in federal government (such as P3 Canada)TSX:WRN / AMEX:WRN22

Step 4: Construction• Usually tied to a Production Decision• Construction in permafrost has particular requirements• expect at least two years advance work required before a new road isready• Important to look at interim transportation while road under construction• Barging• Winter Roads• AirTSX:WRN / AMEX:WRN23

A few observations• Current conservative federal government has a strong northern focus(Northern Strategy): understands the connection between sovereigntyand economic development• Casino is a “game changer” for Yukon• Timing is important, but Casino is rapidly approaching a phase when thefull implications of this development will become better known• Regional infrastructure planning seems to be driven by proponents• Planning work necessary to support regulatory approvals for access issignificant project riskTSX:WRN / AMEX:WRN24

For Further InformationWestern Copper and Gold Corporationwww.westerncoppercorp.comPaul West-Sells, President2050 - 1111 West Georgia StreetVancouver, British ColumbiaCanada, V6E 4M3Toll Free: 1 888 966 9995Phone: 604 684 9497Email: info@westerncoppercorp.comJesse L. Duke P. Geo.Whitehorse, Yukonjesse@northwestel.net867 633-4166TSX:WRN / AMEX:WRN25